New-home prices in China rose sharply in February from January, prompting speculation that Beijing will crack down further on property speculation; Jiang Jiemin, chairman of China’s largest oil and gas company, will take the top job at the country’s state-asset regulator, as the shuffling of posts under new Communist Party leadership continues; Denmark’s Lego A/S is building a first toy factory in China to supply growing Asian demand for its iconic plastic bricks and reap profit from what is set to become the world’s largest toy market.

In a sign of how the Bo Xilai affair has shaped the thinking of China’s rulers, the incoming Communist Party leadership appointed a new domestic security chief but downgraded the position; Toys “R” Us Inc. plans an online and bricks-and-mortar push in China, its top executive said, in a bet that a growing middle class will see play time as increasing essential; when Asia-Pacific leaders gather this weekend in Southeast Asia—a bright spot in a sputtering global economy—their Cambodian hosts may extend a warm welcome to U.S. President Barack Obama, but they will view officials from Beijing as old friends.

After two years of living in her six-story Shanghai mansion, Mattel’s iconic American doll Barbie is moving out. The dream house has officially closed, and according to analysts, it’s because Barbie didn’t quite cut it with Chinese shoppers in the big city.

Mattel says Barbie was ready to move on. The Shanghai flagship store, which featured a spa, a cosmetics counter, and a cocktail bar, served its purpose and was meant only to establish Barbie’s brand in China. Read More »

A company’s inadequate supervision of its Chinese suppliers can have costly repercussions.

For Mattel, which was at the center of the Chinese-made-toy scandal two years ago when some of its products were found to have faulty designs or contain dangerous levels of lead, it goes beyond a tarnished reputation and lost sales.

It is also paying the highest toy-related penalty ever imposed by the U.S. Consumer Product Safety Commission. Mattel and its Fisher-Price unit agreed to pay a $2.3 million civil penalty to settle allegations that they knowingly imported and sold up to two million toys that contained excessive levels of lead. Under the settlement agreement, Mattel and Fisher-Price will not admit to any wrongdoing.

In 2007, Mattel recalled more than 21 million toys made in China, including Barbie dolls and infants’ toys made by Fisher-Price. The CPSC said that between July 2006 and August 2007, prior to the recalls, Mattel had imported as many as 900,000 noncompliant toys, while Fisher-Price had imported another 1.1 million noncompliant toys. Read More »

A recent round of inspections in Guangdong, the southern province that is China’s manufacturing center, found that a large portion of children’s clothing and furniture failed safety standards, with many items containing excessive amounts of harmful chemicals.

Of 60 pieces of clothing tested, only 31 were safe for children to wear, the China Daily reports. Some items contained levels of formaldehyde exceeding the legal limits, while others used false information about raw material or had poor color fastness, the report said.

Among the 62 pieces of furniture tested, 42 pieces, or 68%, were considered safe for children. Problems with the furniture items included the excessive levels of formaldehyde and heavy metals (such as lead, cadmium and chromium) and mechanical flaws. Read More »

Pink is the navy blue of India, the late Vogue editor Diana Vreeland once supposedly said. Had she visited Mattel’s (MAT) mammoth Barbie store in Shanghai, she might have mentioned China instead.

The six-story emporium, which official opened today, is a veritable paean to the shade, from the escalator — a pink tunnel that echoes with pre-recorded girlish giggles — to the custom-made, butterfly-shaped motifs on clothes-racks. There’s a spa, a cosmetics counter, a cocktail bar and designer offerings from the likes of Vera Wang, “Sex and the City” designer Patricia Field and handbag maker Judith Lieber. There’ll even be a Barbie wedding dress, a sleeveless ivory creation from Ms. Wang costing US$15,000.

The store is aimed at widening Barbie’s traditional demographic of young girls to include grown women. The brand is mature and occasionally comes under criticism in the U.S. But Chinese women haven’t grown up playing Barbie dolls. In China, “we have an opportunity to shape the perception of the brand the way we want it,” said Richard Dickson, executive vice president of Barbie brands. “The brand is no longer a doll. The doll is a gateway,” he said.

China’s toys and games market–including video games– is currently about a sixth the size of the U.S. market but is forecast to grow 20% annually, compared to 3.3% in the U.S., according to Euromonitor. Take away video games and the outlook is even more dismal for America: in traditional toys segment, U.S. growth rate is negative 3%, compared to 17% growth for China.

The retail experiment reflects China’s unique attraction to brands seeking a fresh shot in the arm amidst sagging sales elsewhere. China has proven to be fertile grown for other aging brands re-positioning themselves. General Motors’ Buick, for example, is seen as a prestigious luxury vehicle among young affluent Chinese consumers despite its reputation in the U.S. as the car of choice for retirees. Read More »

Expert Insight

China’s territorial ambitions in the East and South China seas are by now well-documented. Much less understood is one of the key factors in the country’s ability to realize those ambitions: an increasingly well-funded and capable maritime militia.

The U.S. has been urging allies to steer clear of Asia's new China-led infrastructure investment bank. Robert Zoellick, former president of the World Bank, calls that approach mistaken on multiple levels.

Can legal reform and Communist Party control coexist in a way that will benefit Chinese governance and society?This is the question that confronts the country in the wake of its annual legislative gathering.

China's just-concluded legislative sessions seem to be another example of the deinstitutionalization of politics under Xi Jinping. Months from now, these meetings won’t be seen as harbingers of reform, so much as another lost opportunity, writes CRT analyst Russell Moses.

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